Future Shop has joined a growing list of failed electronics retail brands, with the sector becoming increasingly competitive as consumers comparison shop with discount and online retailers.

In a statement released Saturday, parent company Best Buy Co. Inc. announced it had abruptly closed 66 of the Canadian electronics retailer’s 131 stores and plans to turn the other half into Best Buy locations. The company said 1,000 full-time and 500 part-time workers at Future Shop have lost their jobs as a result of the decision.

Best Buy also announced plans to spend $200 million to improve Canadian Best Buy stores and upgrade BestBuy.ca. The company warned the spending and restructuring will likely cut earnings per share by US10 to US20 cents over the coming year, representing 8% of the average analyst estimate for fiscal 2016 earnings per share of $2.56, according to data from Reuters.

It’s been a tough year for many well-known retailers. The women’s clothing chain Reitmans announced it will close or re-brand 107 Smart Set stores in November, Mexx Canada’s Dutch-based parent company declared bankruptcy in December and Target Corp. abandoned its Canadian expansion in January after losing $2 billion in two years. Electronics stores in particular have experienced challenges, with Sony Corp. announcing plans to close its 14 Canadian Sony Stores in January and RadioShack Corp. entering Chapter 11 bankruptcy the following month.

Maureen Atkinson, a senior partner with the international retail consultants J.C. Williams Group, said the “Amazon effect” is partly to blame. Canadians now buy one-third of their electronics online, according to research from her firm.

That’s the thing about retail — you have to change

However, Ms. Atkinson said the changes Best Buy is making should help the chain avoid RadioShack’s fate.

“When [RadioShack] started to make moves, they were already far down the road in terms of being redundant,” Ms. Atkinson said. “That’s the thing about retail — you have to change.”

Canadian Press/Ryan Remiorz

Over time, electronics have become commoditized, with competing stores offering the same products and the same brands. Electronics have also moved beyond specialty stores and into big box retailers like Costco and Walmart and online retailers like Amazon.com Inc., making it difficult for competitors to match their prices.

The boom time for electronics stores may be over, but the category is far from dead, retail analyst John Winter said. He referred to Statistics Canada data showing sales at electronics and appliance stores were up 7% in January compared to the same month the previous year.

Mr. Winter said the timing of the Future Shop announcement probably has to do with Christmas sales. He noted Target’s decision to leave Canada came shortly after a disappointing Christmas season.

“They have the opportunity to cherry-pick those stores that are the best performers and close down those that are not such good performers,” Mr. Winter said.

Canadian Press/Aaron Lynett

Best Buy might want to consider studying The Source stores, which have been able to avoid the fate of their former owner RadioShack and are currently owned by telecommunications giant BCE Inc. A spokesman for BCE was unable to provide updated figures on the weekend, but in June the company said The Source’s management has been growing sales between 2% and 6% annually by offering niche gadgets, operating out of small-footprint urban locations and functioning as a marketing and distribution portal for Bell.

As Best Buy noted in its news release, many Future Shop stores were so close to Best Buy locations that they shared a parking lot, raising the question of why the company operated them as separate brands for so long. Best Buy acquired Future Shop for $580 million in 2001, 19 years after businessman Hassan Khosrowshahi founded the company in Burnaby, B.C. and grew it into the largest Canadian retailer of consumer electronics.

Mark Satov, a business adviser and customer strategist with Satov Consultants, said the two-brand strategy worked as long as the demand was there.

“The idea was, we’re going to get more total business by having more doors. We’re going to be able to differentiate a little bit and we’re going to own more of the market,” Mr. Satov said. “That doesn’t justify the extra cost any more.”

Consolidating the two brands may have been necessary, but retail analyst and CustomerLab chief executive Jim Danahy said the lack of notice Best Buy gave Future Shop employees was not. Future Shop workers reported showing up for shifts on Saturday only to learn the stores were closed and they had lost their jobs, effective immediately.

“This isn’t a bankruptcy, so there is no conceivable operational or legal reason not to warn their people before locking the doors,” Mr. Danahy said in an email. “It’s doubly strange since they expect half of the Future Shop store staff to return to those locations once they are converted into Best Buy stores.”